XN000022-1996-06-05 — Page 30

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Working Group's Review of the Hospital Authority Remuneration Package

On the principle of cost comparability, the Committee has recommended the Administration to clearly define and properly document the principle. We accept that the wording of the principle as quoted in the Audit Report, if taken out of context, might be open to interpretation. We have reviewed the principle of cost comparability which was agreed between Government and the Authority in the design of its package. We have concluded that the principle should continue to be applied in the funding of the Authority. The principle is that, in terms of total cost to Government as an employer, the cost of the Hospital Authority and the civil service remuneration packages should be comparable. The total cost refers to the aggregate of salary and oncost of staff in individual pay Bands using the prevailing cost of the civil service package as the basis of comparison. Since Government's concern is overall funding of the Authority, it follows that the principle should relate to "cost to Government as an employer" rather than "value to the employee".

The Working Group on the Review of the Hospital Authority Remuneration Package, chaired by the Secretary for Health and Welfare, has concluded that, in terms of total cost to Government as an employer, the respective packages in respect of the Hospital Authority and the civil service, excluding the disciplined services, are broadly comparable at present. It is of the view that, over time, the total cost of the Authority and the civil service packages will diverge, with the major contributing factor being the different housing oncost rates.

Government is discussing its plan with the Authority to introduce a revised arrangement to fund the Authority's staff appointed after a cut-off date to maintain cost comparability over time. Government, however, recognises the Authority's contractual obligations to its serving staff and therefore their staff costs will continue to be funded on the basis of the existing Hospital Authority package.

Here, I would like to stress again that Government is highly appreciative of the dedicated efforts of the Authority staff in ensuring the provision of quality hospital care to the community.

Information to ExCo and LegCo

Finally, I would like to assure this Council that the Administration will continue to make every effort to provide the Executive Council and the Finance Committee of this Council with full information where this would affect significantly the long-term cost of a policy option.

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